Written by / Cheng Liang
Editor / Yang Jie
Cross-border e-commerce has blown up the "listing wind".
On March 7, cross-border e-commerce sub-whisper group submitted an application for listing on the main board to the Hong Kong Stock Exchange, with Huatai International and ABC International as joint sponsors. It is reported that Zi Wushu had submitted an application on June 30, 2021, which was already its second submission. At the same time as it submitted the table for the first time last year, cross-border e-commerce companies such as Dunhuang.com, San-State Electronics and Feishu Shennuo have submitted listing applications one after another.
A few days ago, shein, the largest cross-border e-commerce company in China and B2C fast fashion giant, was also exposed to the news that it intends to restart its listing plan in the United States, and there are even rumors that its headquarters has been transferred to a Singapore company to prepare for its listing. The cross-border e-commerce brand Saiwei Times, which is lining up for listing on the ChiNext Board, has also updated its prospectus and intends to list on the Shenzhen Stock Exchange, raising 622 million yuan, with Orient Securities as its sponsor.
In the cross-border e-commerce listing heat wave, Zi Buyu is one of the "main players". According to its prospectus, as an operator of fashion apparel and footwear products, the company's revenue will reach 2.347 billion yuan in 2021 and achieve a net profit of 201 million yuan. At the same time, in the company's development strategy of the prospectus, the establishment of a large independent self-operated website is deliberately emphasized to enhance brand awareness and customer loyalty, as well as to seek suitable opportunities to invest in or acquire target brands along the industrial chain to explore synergies.
According to statistics from the General Administration of Customs, the import and export volume of cross-border e-commerce in the mainland will reach 1.98 trillion yuan in 2021, an increase of 15%; of which exports will be 1.44 trillion yuan, an increase of 24.5%. According to the "2021 China Cross-border E-commerce Investment and Financing Data Report" of the Network Economic And Social Agency, the number of cross-border e-commerce financing transactions in China in 2021 exceeded 70, with a total amount of more than 20 billion yuan, of which the single financing of Patpat, Cider and other projects reached hundreds of millions of DOLLARs.
But when cross-border e-commerce boomed, last year's nearly 5-month-long "Amazon banning" incident poured a basin of ice water on the cross-border business of domestic small and medium-sized sellers. According to the statistics of Shenzhen Cross-border E-commerce Association, in just 2 months, more than 50,000 Chinese sellers have been blocked on Amazon's platform, and the industry is expected to lose more than 100 billion yuan.
Entering 2022, many cross-border e-commerce companies that rely on third-party platforms for sales have begun to plan their own websites, and some companies that have been "stranded" in listing plans are also eager to try.
"Chinese version of Zara", with 151 brands
Most domestic consumers are not familiar with the "sub-language". The cross-border e-commerce that relies on the "fast fashion" route of affordable volume to occupy the market was once called "China's version of Zara" by the industry.
According to public information, Zhejiang Ziwu E-commerce Co., Ltd. was established in 2011, and the legal representative is Hua Bingru. From the perspective of transaction mode, cross-border e-commerce can be divided into B2B and B2C. Among them, B2B model enterprises exchange products, services and information by docking enterprises or merchants, while Zi Non-Speech focuses on the B2C model, sells products directly to overseas consumers, and mainly completes transactions through third-party e-commerce platforms and self-operated platforms.
Hua Bingru, the founder of Zi wu, started a Taobao shop in his dormitory as early as 2009 when he was a college student and began to sell clothes and shoes.
In 2014, Zi Buyu registered its first online store on Amazon, taking an important step from taobao merchants to cross-border e-commerce. A year later, the company opened a new store on the US cross-border e-commerce platform Wish and began operating its own website business in 2018. At present, it has formed a supply chain system integrating product research and development, design, production and sales.
Zi Buyu said in the prospectus that the company is already one of the largest cross-border e-commerce companies in China, focusing on the sale of clothing and footwear products through third-party e-commerce platforms. According to the GMV of apparel and footwear products sold in 2020, Zibu ranked third among all platform sellers in China's cross-border export B2C e-commerce apparel and footwear market, accounting for 0.4% of the market share.
From 2019 to 2021, the company achieved revenue of 1.429 billion yuan, 1.898 billion yuan and 2.347 billion yuan respectively, and obtained net profits of 81 million yuan, 114 million yuan and 201 million yuan respectively. The vast majority of Zi Mu's revenue comes from clothing and footwear products, of which the sale of clothing is the mainstay. In the same period, the revenue of apparel and footwear products accounted for 98.2%, 91.6% and 97.5% of the total revenue, respectively.
At present, North America and Europe are the main markets for sub-speech, with revenue from the United States accounting for 85.5%; followed by Germany with 3%.
According to the prospectus, the company's main target customers are female customers aged 18-45, who pursue high-quality, affordable and affordable women's clothing products. From 2019 to 2021, the average sales price of Zibuyu's apparel products was 107 yuan, and the average price of footwear products was 237.33 yuan.
In fact, before the sub-silence, the title of "China's version of Zara" was the fast fashion women's cross-border B2C giant Shein. Founded in 2008, Shein founded its own brand, self-operated website and app application in 2014. According to eMarketer data, Shein's app downloads in the U.S. market have reached 32 million in 2021, second only to Amazon.
But unlike Shein, the brand awareness of Zibu whisper is not so high, more like an "invisible" brand aggregation place - according to the prospectus, by the end of 2020, Zi Buyu has designed 151 brands on its own.
Among the many "unknown" brands on Amazon and other platforms, including the brand Imily Bela, which focuses on women's and children's wear, Tutorutoo, the women's suit brand Cicy Bell, the women's sportswear brand Aurgelmir, the men's wear brand Runcati, etc., are actually from the hands of the son. Among them, a women's sweater from Ily Bela, sold more than 300,000 pieces on Amazon. Zi Buyu specifically emphasized that among the many brands it owns, there are 20 "explosive products" with annual sales of more than 10 million yuan.
With the domestic women's clothing supply chain, the main independent design and OEM (OEM production)-based "fast reaction mode", from sample production to the launch of the first batch of products the shortest time can be compressed to 7 days, more than Zara's 14 days.
However, creating a truly classic "blockbuster" is not an easy task. Among the many products owned by ZiBu, there are actually only 20 "blockbusters", and not all of them can sell well. Even Zara herself is facing the problem of slowing down the pace of innovation in "fast fashion" and shrinking the market.
What's more, Zi Wu also has the "parasitic" shackles that cross-border e-commerce is difficult to get rid of on platforms such as Amazon.
Sub-silent dependence anxiety
Zi Wu still has a serious "dependence" on the two major platforms of Amazon and Wish.
In the first article of the prospectus risk warning, Zi Wu said that the interruption of its relationship with third-party e-commerce platforms (especially Amazon and Wish) and the adverse changes in the terms of the arrangement may have a material adverse impact on the company's business and operating results.
From 2019 to 2021, the revenue generated by the company's sales through third-party e-commerce platforms accounted for 91.9%, 79.3% and 87.5% of the total revenue, respectively. Among them, the revenue generated through Amazon and Wish sales accounted for 86.0%, 76.7% and 84.2% respectively.
Amazon's ban on Chinese sellers has also sounded the alarm for cross-border e-commerce companies such as ZiBu. ZiBu is also constantly reducing the proportion of sales on platforms such as Amazon in total revenue, but the company still admits in the prospectus: "In the foreseeable future, our sales through Amazon and Wish will continue to account for the vast majority of our total revenue." ”
It is worth noting that from 2019 to 2021, the total number of active users of Zibu on each platform was 10.778 million, 11.446 million and 5.182 million, respectively. It is not difficult to see that there will be a significant decline in 2021, and among them, the decline in the Wish platform is the most obvious, as high as 67.14%. At the same time, the number of active users on amazon's platform is also declining year after year, and the return rate is also rising.
In this regard, the company explained that it is due to the shift of its business center to Amazon for sales in 2021, and Amazon has begun to use more FBA mode (Amazon warehousing delivery mode, sellers first send goods to Amazon transit warehouses in advance, shipped by Amazon), resulting in the company's lack of customer data on Amazon.
In addition, the Company noted that as third-party platforms update their policies from time to time without prior notice, sudden changes to the Company may also result in increased costs and expenses.
In order to get rid of this "shackles", Zi Buyu also increased its efforts to operate an independent self-operated website. However, although its self-operated website has high hopes, its development still has time. The number of orders, sales revenue, number of active users, sales revenue contributed by active users, number of registered users and sales revenue contributed by registered users on its own website will all decline in 2021.
In addition, due to the relatively slow collection speed of products sold by third-party platforms, Ziwu has borne heavier asset operating costs, and the company's debt ratio is also high. In 2019, 2020 and 2021, the asset-liability ratio of Sub-Language reached 86.4%, 73.2% and 63.4% respectively.
Cross-border e-commerce ushered in the era of "independent stations"?
According to the "2021 Cross-border E-commerce Development Report" released by Ebang Think Tank, in 2021, under the dual stimulation of the rise of independent stations (that is, self-operated websites) and amazon banning events, cross-border e-commerce companies have begun to rethink their own development models and make new trade-offs between scale growth and brand value.
E-commerce analyst Li Chengdong told Caijing Weekly: "Affected by the epidemic, cross-border e-commerce has ushered in barbaric growth from 2020 to the first half of 2021, but as the epidemic improves, people have begun to return to offline consumption, and with the change of trade rules and platform rules, cross-border e-commerce has actually entered the second half." The dividend period of selling goods has passed, and the brand going overseas may be a major trend. ”
For cross-border e-commerce companies, independent stations have begun to play an increasingly important role in the brand growth of enterprises. The report shows that with the maturity of SaaS (software services provided through the network) type of website building services and supporting marketing promotion services in recent years, independent stations have become an important direction for the layout of cross-border e-commerce enterprises. Among the nearly 300 companies surveyed by Ebang Think Tank, 31% of the surveyed companies have laid out independent stations; among the enterprises that have not established independent stations, 21% of them are preparing to build a station.
It is reported that compared with the platform model, cross-border e-commerce operating in the independent station model can save the platform fee and pay a relatively low payment end service fee, thereby obtaining higher sales profits; second, the initiative to build the station is in the hands of the enterprise, the operation is more flexible, and there is no need to worry about the impact of the sudden change of rules, and it is conducive to cultivating consumers' trust in their own brand products; the third is to confirm data security to a large extent, and facilitate secondary development and mining more data value.
In this silent listing fundraising plan, the construction of a large independent website has become a key part. It is understood that the company expects to invest part of the funds in the marketing solution in the initial development phase of the independent website from May 2022 to May 2023.
In addition, as a giant of domestic cross-border e-commerce and the most successful women's clothing brand in the sea, Shein is also a large independent website. According to Tianyancha data, as of now, Shein has completed 6 rounds of financing, and in the 2020 Series E financing, its valuation has exceeded 15 billion US dollars.
"However, it is not easy to do a good job of independent stations. The construction and operation of the entire website will consume a lot of money and manpower, the cost is very high, not everyone can afford and continue to operate well. Due to the competitive needs of third-party platforms and their own brand growth, many merchants have to do independent stations, even if doing independent stations is not necessarily a good way out. Li Chengdong said.
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